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Business News of Thursday, 20 February 2020

Source: www.ghanaweb.com

SOTN2020: Banks’ clean-up exercise was tough but the right thing to do - Akufo-Addo

President Nana Addo Dankwa Akufo-Addo during his fourth State of the Nation Address has stated categorically that the weak banking sector that his government inherited from the opposition National Democratic Congress (NDC) is now vibrant after the Securities and Exchange Commission (SEC) and the Bank of Ghana embarked on a financial cleaned up exercise.

According to him, embarking on such an exercise was tough, but the right thing to do to stabilise the financial sector.

Giving assurance to Ghanaians who have their monies locked up in any of the 420 collapsed institutions, President Akufo-Addo reiterated his decision of refunding their monies to them in full.

It would be recalled that in August 2017, the financial sector cleanup led to the collapse of 9 universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions over issues of maintaining the minimum capital requirement.

Though some banks, including, Construction Bank, Beige Bank, Royal Bank, uniBank and Sovereign Bank had their license revoked, some were fortunate to be merged to operate as the Consolidated Bank with Government of Ghana having 100% shares in it.

Last year, President Akufo-Addo granted an executive approval for the expenditure of GHS15.6 billion to save the funds of depositors who had their monies locked up in the collapsed of some financial institutions two years ago. In a press release signed by Presidency, it pointed out that the money released is expected to improve the liquidity of the financial sector.

The president’s State of the Nation address is in accordance with Article 67 of the 1992 Constitution of the Republic of Ghana and the Standing Orders of the Parliament of Ghana.

The address is to update Ghanaians on the government’s progress and outline plans for the next financial year. The president’s speech covers, in broad terms, areas such as the economy, education, health, security and infrastructure.

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